A huge spike in demand for physical precious metals has decimated available dealer inventories. The vast majority of gold and silver coins, rounds, and bars are either out of stock or come with extended shipping delays.
Premiums are spiking higher. Dealers have raised bid premiums – the amount offered above the spot metal price – dramatically along with ask premiums.
The market is still searching for equilibrium and bids dealers pay may need to go even higher to entice enough sellers to meet demand.
Demand continues to far outstrip available supply of minted items.
The problem is being compounded as mints and refiners close in response to the COVID-19 virus. The Royal Canadian Mint announced it will be closed effective March 20th for at least two weeks. Some speculate that the US Mint facility in West Point, NY may also suspend operations.
The outlook for supply is exceedingly difficult. Pandemic fears first drove unprecedented demand for physical bullion products. Now it may force the relative handful of major producers to suspend operations.
US Mint officials already suspended new orders for gold and silver American Eagle coins. They could also have to suspend all work to clear the backlog. Private mints and refiners are wrestling with the same challenges.
The supply problem, in our view, figures to get worse before it gets better. That means premiums are likely to go even higher from here.
Unfortunately, it may be quite some time before premiums fall. As described, the short-term outlook for fabricators is bleak. And order volume at Money Metals remains 4 times higher than the levels of just three weeks ago. Money Metals Exchange staff are working overtime to secure enough inventory and ship orders, and continue to raise bid prices.
It’s Actually Possible for Retail Investors to Obtain Gold & Silver Near Spot
It’s not surprising there is frustration from investors over current premiums. They want to take advantage of silver spot prices near $13/oz and then find the price of virtually any silver product is much closer to $19 or $20/oz, if not higher.
This is simply the result of essentially zero sellers and demand that’s off the charts.
That’s why Money Metals Exchange just introduced one very good option for gold and silver buyers. It is called Vault Silver and Vault Gold. Buyers can get ounces of .999+ pure silver or pure gold securely stored in their name and at super low premiums.
Premiums for silver start at just $1/oz and gold starts at just $5/tenth oz ($50/oz). (For now, there is an order minimum size of 200 silver ounces or two gold ounces.) Money Metals will buy back your ounces any time – currently at the spot price.
Physical gold and silver investors can finally capitalize on today’s low futures market prices and also get access to the lowest bid/ask spreads around!
Ounces purchased will be placed in Money Metals’ Class III vault in Massachusetts without the big delays or the costs and uncertainties associated with shipping right now. Fees for secure storage of your metal are less than ½ percent per year.
The bottleneck in supply is currently limited to smaller fabricated products – coins, rounds and silver bars of 100 ozs or less. Thousand-ounce silver bars and larger gold bars are currently available without huge premiums. It is allocated portions of those large commercial bars that will be held by Vault Gold and Vault Silver clients.
Money Metals Exchange and its staff do not act as personal investment advisors for any specific individual. Nor do we advocate the purchase or sale of any regulated security listed on any exchange for any specific individual. Readers and customers should be aware that, although our track record is excellent, investment markets have inherent risks and there can be no guarantee of future profits. Likewise, our past performance does not assure the same future. You are responsible for your investment decisions, and they should be made in consultation with your own advisors. By purchasing through Money Metals, you understand our company not responsible for any losses caused by your investment decisions, nor do we have any claim to any market gains you may enjoy. This Website is provided “as is,” and Money Metals disclaims all warranties (express or implied) and any and all responsibility or liability for the accuracy, legality, reliability, or availability of any content on the Website.